Exhibit 4.2
SECOND AMENDMENT TO CREDIT AND SECURITY AGREEMENT
This Amendment, dated as of September 5, 2003, is made by and between
Ramtron International Corporation, a Delaware corporation, Enhanced Memory
Systems, Inc., a Delaware corporation, and Mushkin Inc., a Colorado
corporation (the "Borrowers"), and Xxxxx Fargo Business Credit, Inc., a
Minnesota corporation (the "Lender").
Recitals
The Borrowers and the Lender are parties to a Credit and Security Agreement
dated as of March 31, 2003 (the "Credit Agreement"). Capitalized terms used
in these recitals have the meanings given to them in the Credit Agreement
unless otherwise specified.
The Borrowers have requested that certain amendments be made to the Credit
Agreement, which the Lender is willing to make pursuant to the terms and
conditions set forth herein.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements herein contained, it is agreed as follows:
1. Defined Terms. Capitalized terms used in this Amendment which are
defined in the Credit Agreement shall have the same meanings as defined
therein, unless otherwise defined herein. In addition, Section 1.1 of
the Credit Agreement is amended by adding or amending, as the case may
be, the following definitions:
"Borrowing Base" as of any date of determination for any Borrower means
at any time an amount equal to the lesser of:
(a) the Maximum Line; or
(b) subject to change from time to time in the Lender's sole
discretion, with respect to Ramtron, 80% of such Borrower's
Eligible Accounts; with respect to Mushkin, 70% of such Borrower's
Eligible Accounts; and with respect to EMS, zero.
"Floating Rate" means an annual interest rate equal to the sum of the
Base Rate plus one and three-quarters percent (1.75%), which interest
rate shall change when and as the Base Rate changes.
2. Minimum Interest Charge. Section 2.4(b) of the Credit Agreement is
hereby modified to read in its entirety as follows:
Page-1
"(b) Minimum Interest Charge. Notwithstanding the interest payable
pursuant to Subsection (a), the Borrowers shall pay to the Lender
interest of not less than $30,000 per calendar quarter (the "Minimum
Interest Charge") during the term of this Agreement, prorated for
periods less than one calendar quarter, and the Borrowers shall pay any
deficiency between the Minimum Interest Charge and the amount of
interest otherwise calculated under Subsection (a) on the first day of
each calendar quarter and on the Termination Date."
3. Consolidated Minimum Book Net Worth. Section 6.2(a) is amended to
read in its entirety as follows:
"(a) Consolidated Minimum Book Net Worth. Ramtron on a consolidated
basis will maintain, as of each date described below, their Book Net
Worth (excluding the effects of any non-cash charges resulting from the
amendment of its debenture agreements, including changes in the debt
payment schedule and a reduction in the strike price of warrants held
by Infineon Technologies AG, Xxxxxxxx Capital Corp., and Halifax Fund,
L.P.) at an amount not less than the amount set forth opposite such
date:
Date Minimum Book Net Worth
---------------------- ----------------------
August 31, 2003 $15,950,000
September 30, 2003 $15,675,000
October 31, 2003 $15,425,000
November 30, 2003 $15,400,000
December 31, 2003
and the last day of
each month thereafter $15,750,000"
4. Consolidated Minimum Net Income. Section 6.2(b) is amended to read in
its entirety as follows:
"(b) Consolidated Minimum Net Income. Ramtron on a consolidated basis
will achieve as of each date set forth below, fiscal year-to-date Net
Income (excluding the effects of any non-cash charges resulting from
the amendment of its debenture agreements, including changes in the
debt payment schedule and a reduction in the strike price of warrants
held by Infineon Technologies AG, Xxxxxxxx Capital Corp., and Halifax
Fund, L.P.) of not less than the amount set forth opposite such date:
Date Minimum YTD Net Income
---------------------- ----------------------
September 30, 2003 ($4,525,000)
December 31, 2003 ($4,450,000)"
Page-2
5. Individual Minimum Book Net Worth. Section 6.2(d) is amended to read
in its entirety as follows:
"(d) Individual Minimum Book Net Worth. Each Borrower will maintain, as
of the last day of each month, Book Net Worth (excluding the
effects of any non-cash charges resulting from the amendment of
Ramtron's debenture agreements, including changes in the debt
payment schedule and a reduction in the strike price of warrants
held by Infineon Technologies AG, Xxxxxxxx Capital Corp., and
Halifax Fund, L.P.) in the amount set forth opposite such Borrower
in the table below:
Borrower Minimum Book Net Worth
---------------------- ----------------------
Ramtron $12,750,000
EMS $1,000,000
Mushkin $8,000,000"
6. No EMS Collateral Reporting. For so long as its Borrowing Base is zero,
EMS shall not be required to submit the reports described in subsection
6.1(c) of the Credit Agreement.
7. No Other Changes. Except as explicitly amended by this Amendment, all
of the terms and conditions of the Credit Agreement shall remain in full
force and effect and shall apply to any advance or letter of credit
thereunder.
8. Waiver of Defaults. The Borrowers are in default of Section 6.2(a) of
the Credit Agreement as of June 30, 2003 and July 31, 2003, and of
Section 6.2(b) of the Credit Agreement as of June 30, 2003 (the
"Existing Defaults"). Upon the terms and subject to the conditions set
forth in this Amendment, the Lender hereby waives the Existing Defaults.
This waiver shall be effective only in this specific instance and for
the specific purpose for which it is given, and this waiver shall not
entitle the Borrowers to any other or further waiver in any similar or
other circumstances.
9. Amendment Fee. The Borrower shall pay the Lender as of the date hereof
a fully earned, non-refundable fee in the amount of $20,000 in
consideration of the Lender's execution and delivery of this Amendment.
10. Conditions Precedent. This Amendment, including the waiver set forth in
Paragraph 8 hereof, shall be effective when the Lender shall have
received an executed original hereof, together with the following, each
in form and substance acceptable to the Lender in its sole discretion:
(a) The fee described in paragraph 9.
(b) Such other matters as the Lender may require.
Page-3
11. Representations and Warranties. The Borrowers hereby represent and
warrant to the Lender as follows:
(a) Each Borrower has all requisite power and authority to execute
this Amendment and to perform all of its obligations hereunder,
and this Amendment has been duly executed and delivered by such
Borrower and constitutes the legal, valid and binding obligation
of such Borrower, enforceable in accordance with its terms.
(b) The execution, delivery and performance by each Borrower of this
Amendment have been duly authorized by all necessary corporate
action and do not (i) require any authorization, consent or
approval by any governmental department, commission, board,
bureau, agency or instrumentality, domestic or foreign, (ii)
violate any provision of any law, rule or regulation or of any
order, writ, injunction or decree presently in effect, having
applicability to such Borrower, or the articles of incorporation
or by-laws of such Borrower, or (iii) result in a breach of or
constitute a default under any indenture or loan or credit
agreement or any other agreement, lease or instrument to
which such Borrower is a party or by which it or its properties
may be bound or affected.
(c) All of the representations and warranties contained in Article V
of the Credit Agreement are correct on and as of the date hereof
as though made on and as of such date, except to the extent that
such representations and warranties relate solely to an earlier
date.
12. No Other Waiver. Except as set forth in Paragraph 8 hereof, the
execution of this Amendment and acceptance of any documents related
hereto shall not be deemed to be a waiver of any Default or Event of
Default under the Credit Agreement or breach, default or event
of default under any Security Document or other document held by the
Lender, whether or not known to the Lender and whether or not existing
on the date of this Amendment.
13. Release. Each Borrower hereby absolutely and unconditionally releases
and forever discharges the Lender, and any and all participants, parent
corporations, subsidiary corporations, affiliated corporations,
insurers, indemnitors, successors and assigns thereof, together with
all of the present and former directors, officers, agents and employees
of any of the foregoing, from any and all claims, demands or causes of
action of any kind, nature or description, whether arising in law or
equity or upon contract or tort or under any state or federal law or
otherwise, which such Borrower has had, now has or has made claim to
have against any such person for or by reason of any act, omission,
matter, cause or thing whatsoever arising from the beginning of time to
and including the date of this Amendment, whether such claims, demands
and causes of action are matured or unmatured or known or unknown.
Page-4
14. Costs and Expenses. Each Borrower hereby reaffirms its agreement under
the Credit Agreement to pay or reimburse the Lender on demand for all
costs and expenses incurred by the Lender in connection with the Loan
Documents, including without limitation all reasonable fees and
disbursements of legal counsel. Without limiting the generality of the
foregoing, each Borrower specifically agrees to pay all fees and
disbursements of counsel to the Lender for the services performed by
such counsel in connection with the preparation of this Amendment and
the documents and instruments incidental hereto. Each Borrower hereby
agrees that the Lender may, at any time or from time to time in its
sole discretion and without further authorization by such Borrower,
make a loan to such Borrower under the Credit Agreement, or apply the
proceeds of any loan, for the purpose of paying any such fees,
disbursements, costs and expenses, and the fee described in paragraph
9.
15. Miscellaneous. This Amendment may be executed in any number of
counterparts, each of which when so executed and delivered shall be
deemed an original and all of which counterparts, taken together, shall
constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed as of the date first written above.
XXXXX FARGO BUSINESS CREDIT, INC.
By: /S/ Xxxxx Xxxxxx
-----------------------------
Xxxxx Xxxxxx
Its: Vice President
---------------------------
RAMTRON INTERNATIONAL CORPORATION
By: /S/ XxXxx X. Xxxxxx
--------------------------
XxXxx X. Xxxxxx
Its: Chief Financial Officer
-------------------------
ENHANCED MEMORY SYSTEMS, INC.
By: /S/ XxXxx X. Xxxxxx
--------------------------
XxXxx X. Xxxxxx
Its: Chief Financial Officer
-------------------------
MUSHKIN INC.
By: /S/ XxXxx X. Xxxxxx
--------------------------
XxXxx X. Xxxxxx
Its: Chief Financial Officer
-------------------------
Page-5
